2024 (10) TMI 1169 - HC - GST

Seeking for a direction to the Respondent to process the refund application and sanction the refund along with interest - time limitation - Zero Rate Supplies - HELD THAT - It is to be noted that initially, the petitioner has made application well within time, i.e. on 22.02.2018, claiming refund of the tax under Section 54 of CGST Act, 2017 followed a reminder letter dated 29.03.2019, but the respondent has not processed the same, but after a lapse of more than one year, they issued a Deficiency Memo on 12.04.2019 calling upon the petitioner to rectify certain deficiencies mentioned therein. According to the petitioner, they had not received the said Deficiency Memo and they came to know only when they received a letter dated 26.5.2023 from the respondent. Therefore, since the petitioner has made the application claiming refund of the tax within the time, which was not processed by the respondent more than a year, this Court is of the view that it would be appropriate to direct the respondent to process the application without insisting limitation aspect and pass orders therein. The respondent is directed to process the refund application dated 22.02.2018 filed by the petitioner and pass appropriate orders in accordance with law, after giving an opportunity of hearing to the petitioner, within a period of four (4) weeks from the date of receipt of a copy of this order. This writ petition is disposed of.

Summary

Issues:
1. Refund application processing delay and deficiency memo dispute.

Analysis:
The petitioner, engaged in civil contracting works, supplied goods to an SEZ unit and paid IGST. The petitioner filed a refund application for the IGST paid, as zero-rated supplies to the SEZ unit, within the stipulated time. However, the respondent did not process the application for over a year. The respondent later issued a Deficiency Memo, which the petitioner claimed they did not receive. The petitioner requested the respondent to process the refund application after rectifying the alleged deficiencies mentioned in the memo. The respondent refused, citing the expiration of the time limit for processing the application.

The petitioner argued that they timely filed the refund application and followed up with reminders, but the respondent's delay in processing the application was unjustified. The Court noted that the petitioner had submitted the application within the prescribed time, and the respondent's issuance of the Deficiency Memo after a significant delay was unreasonable. The Court directed the respondent to process the refund application without considering the limitation aspect and to pass orders within four weeks from the date of the order, providing an opportunity for the petitioner to be heard.

In conclusion, the Court found in favor of the petitioner, emphasizing the respondent's duty to process refund applications promptly and fairly. The judgment highlighted the importance of timely actions by tax authorities in handling refund claims and ensuring procedural fairness for taxpayers.